Amazon Makes Play for iTunes Customers

Amazon is making a grab for some of Apple's iTunes customers by giving them a Safari browser-based method for making purchases from its MP3 inventory. The service integrates with Amazon's Cloud Player. "It's not likely to impact Apple in a major way," Ross Rubin, principal analyst at Reticle Research. "There are other market trends that are stronger threats to Apple's music business."

Amazon expanded its reach across Apple's music universe Thursday by enabling iOS users to purchase tunes from its MP3 store directly through the Safari Web browser.

To purchase music from Amazon with an iPhone or iPod touch, users can visit the retailer's website
built for the devices, browse its catalog of more than 22 million songs, and complete the buy using an Amazon account.

Before buying anything from the site, though, it's best to install Amazon's free Cloud Player software on your iPhone or iPod. It's available from the iTunes App Store.

Purchased music can be played directly from the Internet with the Cloud Player or downloaded for offline listening with the app. Unlike Amazon's desktop music platform, music downloads aren't automatically added to the iTunes library on the device.

The mobile Amazon MP3 store also offers access to daily deals on albums and songs, recommendations based on purchase history and free automatic storage of purchased songs in Amazon's cloud.

No Major Impact

With this move to woo iPhone and iPod users to buy their music from Amazon, will Apple's online music hegemony be threatened?

"It's not likely to impact Apple in a major way," Ross Rubin, principal analyst at
Reticle Research, told MacNewsWorld. "There are other market trends that are stronger threats to Apple's music business, such as the impact of streaming music and subscription services on the purchase of music."

Apple did not respond to our request to comment for this story.

Another factor limiting the impact of Amazon's music service on Apple's music stronghold is reach. "Amazon's service is not global," Ben Bajarin, principal at Creative Strategies, told MacNewsWorld. "It's mostly in the United States and Europe. "

An Amazon spokesperson was not immediately available to comment for this story.

Ecosystem Battle

It's difficult to determine what the impact will be on Apple in the short term of Amazon's music move, according to Gartner research vice president Michael McGuire.

"In the long term, what we're seeing is the battle of these ecosystems," he told MacNewsWorld.

Apple has a closed ecosystem built around its hardware and software sold online and in brick-and-mortar stores, as well as online outlets that sell apps and entertainment under the control of the company.

Amazon has a more open ecosystem built on hardware running an open operating system (Android) and an entertainment platform designed to run on computers and mobile devices of every stripe.

"Apple has a strong user base, but Amazon has done well allowing its users to extend its ecosystem to devices from all vendors," McGuire observed. "This is an extension of Amazon's existing play. They're increasing access points to their existing ecosystem and removing friction for iOS users trying to access that system."

Departure of the Faithful

Amazon, as a pure retailer, has some advantages over Apple. Amazon is like a department store; Apple, a specialty store. "When the two go head to head on something like music, the department store almost always wins," Rob Enderle, principal analyst at the Enderle Group, told MacNewsWorld.

What Apple has going for it is that it has managed to tie its devices to its online stores. "If that tie wasn't in place, Amazon would roll over Apple," he asserted. "Because of that tie, Apple can defend itself from outside attacks on its business."

If Amazon, by offering in-browser music purchasing, undermines the loyalty of the Apple faithful who buy their music at the iTunes store, it could disrupt that vital tie, Enderle reasoned.

"If Amazon breaks the link between iTunes and Apple hardware, much of what ties these devices gets eliminated and it makes a Samsung phone or Android device or Microsoft device a much more compelling choice," he maintained. "The problem here isn't the loss of music revenue. It's the fact that Apple's customer base may become more and more willing to split."